IOTA (IOT)
Basics * Aka MIOTA * Short explanation: Internet-of-things (IoT) payments. * Longer explanation: IOTA is a fundamentally different type of crypto than most others. It is built on top of a directed acyclic graph (DAG) that they call a ‘tangle’ as opposed to a blockchain, which allows it to have zero fees and rapid transactions, as well as being easily scalable. It is therefore suited for microtransactions of value or data between internet-connected devices. * Platform: IOTA tangle, using a small amount of PoW with each transaction. * Current issues: Since the technology is so new and different, IOTA needs to prove that their technology can perform the way they claim, as well as being resistant to hacks and bad actors. There are also a few question marks around the team, with some in the community being concerned by the direction the team is taking. * Not-inflationary, high number for countless devices in the future * Zero premine * No transaction fees especially for use in the Internet of things. Tech * Claimes to be already quantum secure because hash-based Winternitz signatures. * POW while generating addresses and any tx. * DAG and therefore (supposedly) scalable, branch-able for small devices needed in the IoT. * IOTA is different among the cryptos as it doesn’t use blockchain technology but a “Tangle Network” (Just like Byteball) which allows instant, free transactions with the intention of creating a “Machine Economy”. With the rise of the Internet of Things different machines will be able to communicate and pay each other for products or services that can supplement each other. In line with this IOTA is developing its own hardware and a terniary CPU especially for this. However, there are still many questions about the security of the network. * Theoretical confirmation-time: Quasi-infinitesimal. More nodes: faster network. * Currently, a large number of blockchains are set up in such a way, it necessitates the entity of miners. Miners must continuously mine to open new blocks to minimize congestion and to minimize fees which ensures one’s place in the block to get their transaction confirmed. Network congestion and network fees are positively correlated, (the higher the congestion, the higher the fees). So, an inherent problem of blockchain is scalability, if the miners don’t mine quickly, the congestion (unconfirmed transactions) build up, the network becomes slower and fees become higher. * The tangle attempts to solve this problem by eliminating blocks. No blocks means no need for miners, so it eliminates the blockchain problem of scalability from the start. Tangle makes it to where the next transaction will confirm the two prior transactions, the higher the transactions, the the higher the possibility of your transaction becoming confirmed, rapidly, leading to minimal or no fees. * If there is not a directed edge between transaction A and transaction B, but there is a directed path of length at least two from A to B, we say that A indirectly approves B. * In order to issue a transaction, a node does the following: * The node chooses two other transactions to approve according to an algorithm. In general, these two transactions may coincide. * The node checks if the two transactions are not conflicting, and does not approve conflicting transactions. * For a node to issue a valid transaction, the node must solve a cryptographic puzzle similar to those in the Bitcoin blockchain. This is achieved by finding a nonce such that the hash of that nonce concatenated with some data from the approved transaction has a particular form. * In general, nodes do not necessarily see the same set of transactions. It should also be noted that the tangle may contain conflicting transactions. The nodes do not have to achieve consensus on which valid transactions have the right to be in the ledger, meaning all of them can be in the tangle. However, in the case where there are conflicting transactions, the nodes need to decide which transactions will become orphaned. * The topic of economic clustering has been introduced in IOTA, which means that it is not the case that all nodes need to process all transactions anymore. 15 hour bug downtime and coordinator issues * From CoinDesk (30-12-2019): "Users first reported the problem on Sunday, which took IOTA's engineering team some 15 hours to fix. IOTA founder David Sønstebø said the bug was "minor" and "it's really no different from periods where the network has been spammed and thus real tx [transactions] slowed down significantly". IOTA's co-founder Dominik Schiener said in an email the issue originated with the "current primary mainnet node software" and had nothing to do with the Coordinator, a special node that's operated by the Foundation, which is responsible for the final confirmation of transactions on IOTA's decentralized network, known as the Tangle. The team has already started to replace it with a new lightweight node, known as Hornet, and said it plans to remove the Coordinator once engineers have fully tested and resolved any possible network problems with an event known as the "Coordicide." Following reports on the bug in the network on Sunday, Sønstebø defended the current set-up, arguing this was "precisely why Coordicide takes time, one can't execute it until all possible kinks have been ironed out." Nonetheless, critics have already argued the centralized nature of Tangle curtails performance and makes it vulnerable. In 2018, blockchain researcher Joseph Rebstock told The Next Web the Coordinator automatically approves the same hash, meaning hackers could steal cryptocurrency from users who reused wallet addresses by repeating transaction data. Sønstebø later denied this was a vulnerability." Compared to Byteball * From this blog post (3-1-2017): “IOTA is still far away from “mass-adoption”, but also years ahead of Byteball. Months of negotiation and clever strategic management of the IOTA-CORE, especially David Sønstebø’s efforts and Dominik Schiener’s participations in meaningful IoT-conferences, lead to tons of collaborations and partnerings between IOTA and real companies.” “The recently added foundation-members are the first glance at IOTA’s future, which is not stuck in Cryptoland, but located in real global businesses. This is maybe the biggest winning margin IOTA has over Byteball at this moment, for speculators and developers. the difference that Iota is specialized for machine-to-machine use, while Byteball is specialized for human-to-human applications” Pros and Cons Cons * Could be susceptible to 51% attacks (Some argue even 33% attacks) * The creators have implemented a “training stage” until the network is large enough that security is not such a concern. So not decentralized at the moment. As of 7-2019 still uses a coordinator. * Requires specialised hardware which may delay its intended use * The market it’s aiming for doesn’t exist yet * the nodes have nothing at stake for attempting to attack the network which is coia red flag for security. * Created their own Hash Function, not battle tested. “They rolled their own custom hash function called Curl. Lo and behold, an MIT team led by Neha Nerula demonstrated significant vulnerabilities in Curl. They found that Curl produced hash collisions in a predictable way (different inputs hash to the same output) and the team was able to “find collisions using commodity hardware within just a few minutes, and forge signatures on IOTA payments”. The MIT team reported this to IOTA’s team and the bug was swiftly patched.” https://storeofvalue.github.io/posts/iota-what-is-it-and-should-you-invest/ * This hash function is closed source, due to “copy right” so they are not working for the community but for profit. (Sergey Ivancheglo, Iota’s cofounder, claims that the flaws in the Curl hash function were in fact deliberate; that they were inserted as ‘copy protection) * "It was found that despite the theoretical scalability of the Tangle, the actual IOTA protocol has relatively high energy consumption. The Proof-of-Work and transaction signing operations are computationally complex relative to the limited capabilities of many IoT devices and and may be impractical on energy-limited / battery-powered devices." * Leadership infighting (3-2-2020). Pros * Instant, free transactions * New technology * Since every user needs to be a node, the node count will be high. * No miners * Technically should be faster in verification than PoW * If the market takes off it will have positioned itself perfectly * Very large potential market * Several strong partnerships Team, etc. * "''A leaked conversation has revealed (11-8-2018) a serious fallout among the founding members of IOTA. Centered around the appointment of two IOTA founders to the board of directors, the controversial transcript opens with co-founder Sergey Ivancheglo, a.k.a. “Come-From-Beyond,” providing a “vote of no confidence” in co-founder Dominik Schiener, the only delegate with the power to appoint new members. While Ivancheglo did not spell out his reasons for distrusting Schiener, the transcript revealed a political stalemate between a number of founders, who discuss the “long overdue” election of Ivancheglo and Serguei Popov, another founder, to the board." ''Update (3-2-2020)": Still hasn't been resolved. * Davassi, Gianluigi; member of the IOTA-foundation * Come-from-Beyond; Core founder of IOTA, aka Sergey Ivancheglo, possible creator of NXT * Popov, Sergui; Core founder of IOTA * Schiener, Dominik; member of the IOTA-foundation * David Sønstebø; Core founder of IOTA, a real hot head in comment sections. * Cohen, David A.; former member of IOTA foundation, now at Hashgraph * Said to be partnered with Deutsche Telekom, Bosch, PricewhaterhouseCoopers, Accenture, Fujitsu. But said it partnered with Microsoft as well and afterwards it was outed to just be one meeting. * Member of Mobility Open Blockchain Initiative (MOBI) Category:Coins/Tokens